How do you become a bank of the future? Stop thinking like a bank
By Anna Premo, Consulting Industry Lead, Banking and Capital Markets
How do you become a bank of the future? Stop thinking like a bank
Read more about reinventing the bank in the new normal of the financial services landscape.
2020 has been a difficult year for us all. This year’s challenges have pushed countries and communities to the breaking point; entire industries have had to shut shop, the global economy is in a state of uncertainty not seen in decades, and businesses have had to completely rethink how they connect and deliver services to their customers.
For Australian banks, in particular, 2020 has exposed the lack of success of many digital transformation initiatives. Systems and processes that were, in theory, farther along, or purportedly in use, have been revealed to be at best lacking and at worst, completely unworkable. All the years of buzzword-throwing have failed to deliver a truly pragmatic, durable, digital transformation for banks, and our current predicament has shone a spotlight on the institutionalised workarounds banks have put in place to not have to digitise properly.
Disruption is, of course, much bigger than just our banks: it’s enveloping our entire world. If banks start to recognise that disruption is a gigantic red teaming exercise no one could have predicted – but everyone should have been better prepared to handle – there still might be hope for the industry.
A new hope
How do we move forward? First, banks need to have an honest conversation about what is and isn’t working for their business during this incredibly stressful time. Second, they need to truly commit to transforming and recognise that buzzwords in name only are useless. They need to understand that agility, innovation, and digitisation only bring value if they are conceived, planned, and implemented properly. Digital transformation in name only is meaningless.
The banks of the future look less and less like the banks of today
Most banks realise they have to adapt to survive and the answer lies in innovative new products, non-traditional services, and new channels. They know that the answer is digital. They also know this isn’t limited to their customers. The way people work is changing, and just as banks are providing non-traditional services and channels to their customers, so too is there a need for that to be replicated internally.The endgame is clear: banks need to be fully functioning omnichannel businesses, inside and out.
Digital transformation is not delivering value
It has become increasingly evident that the massive investment placed in digital transformation has produced little to no tangible result on the bottom line. Up until now, the benefits have not materialised: not for customers, not for the bank, and not for its shareholders. Even before recent events brought this all to the fore, in the State of the Financial Services Industry 2020, published annually for the Davos World Economic Forum, Oliver Wyman noted widespread shareholder unease at the failure of many large-scale transformation initiatives yet to show improvements in profitability. Wyman went on to explain that while most shareholders believed benefits would arise, it would be due to cost-savings, and not the promised revenue increases and higher customer value.